The European digital workplace market is experiencing significant growth as organizations across various sectors recognize the importance of creating a modern and efficient work environment. A digital workplace refers to a comprehensive set of tools, technologies, and platforms that enable employees to perform their tasks, collaborate effectively, and access relevant information seamlessly.
The market is also witnessing significant advancements and innovations to cater to the diverse needs of organizations across sectors. Providers such as Microsoft, Google, Citrix Systems, Inc., and IBM Corporation are offering comprehensive digital workplace solutions encompassing communication tools, document management systems, collaboration platforms, and employee engagement solutions.
Key Drivers of the European Digital Workplace Market
Deployment in Various Industries
The European digital workplace market caters to various verticals, each with its specific requirements and challenges. The telecommunication and IT-enabled services sector is at the forefront of digital transformation, adopting advanced digital workplace solutions to enable remote work, virtual collaboration, and seamless communication. The BFSI sector emphasizes data security, regulatory compliance, and customer-centricity, leveraging digital workplace tools to enhance customer service, optimize processes, and facilitate secure remote access. In the healthcare and pharmaceutical industries, digital workplace solutions support efficient patient care, collaboration among healthcare professionals, and secure data management.
Rise in Remote and Flexible Work Arrangements
The rise of remote work and flexible work arrangements has been a major driver of the digital workplace market in Europe. Organizations are increasingly recognizing the benefits of enabling employees to work from anywhere, leading to higher productivity, improved work-life balance, and access to a wider talent pool. For instance, during the COVID-19 pandemic, many European companies had to swiftly transition to remote work models, highlighting the need for robust digital workplace solutions to facilitate seamless collaboration and communication among dispersed teams. By May 2021, 12.3% of adults between the ages of 15 and 64 were engaged in remote employment, according to Eurostat. This indicates a 140% rise above pre-pandemic values.
Employee-Friendly Workspace
Organizations are increasingly prioritizing employee experience to streamline workflows. A positive digital workplace experience plays a vital role in fostering employee satisfaction, engagement, and overall well-being. European companies are investing in intuitive and user-friendly interfaces, personalized dashboards, and mobile applications to empower employees and enhance their work experience. For instance, the digital workplace initiatives of companies like Spotify and SAP have received recognition for their focus on employee-centric design and functionality.
Owing to this, new companies are entering into digital workplace solutions to cater to the demand. For instance, in 2017 a startup called HeyTeam, based in Paris, was founded in 2017. HeyTeam is a PeopleOps platform that streamlines the employee journey, providing personalized and collaborative workflows to enhance recognition and retention. HeyTeam supports HR teams from onboarding to offboarding. With automated marketing processes, it offers proactive actions to increase employee well-being and adaptability. In April 2022, the startup raised €10 million ($10.7 million) and plans to expand to Spain and Italy.
Expansions and Innovations by Major Market Players
The European digital workplace market has significant contributors such as Atos SE, Hewlett Packard Enterprise Co, IBM Corp, and Accenture plc., among others. These players assist in the market’s growth with the launch of new products and through collaborations and investments. Some of the recent developments in the market include-
• In January 2023, German startup awork secured €5 million ($5.3 million) in a series A funding round led by Swiss Post Ventures and Hi Inov-Dentressangle. The company provides a collaboration platform targeting the intersection of hybrid working and the creative industries. With 17,000 user accounts and 2,200 corporate customers, awork aims to enhance project management and workflows for creative projects.
• In November 2022, VMware announces new capabilities for its Anywhere Workspace platform to address the challenges faced by IT teams in today's hybrid work environment. The updates include enhancements in digital employee experience management, IT orchestration, and VMware Horizon Cloud, focusing on automation and intelligence to simplify IT operations and improve the employee experience.
• In May 2022, Google announced to introduce additional controls for users of its productivity suite, Google Workspace, in Europe. The controls aim to allow organizations to control, limit, and monitor data transfers to and from the EU, in response to heightened legal risks around data exports. The move comes in anticipation of a report from the European Data Protection Board on the state of play in 2022. The new capabilities include client-side encryption, data location controls, and expanded access controls.